New Zealand to consider three-year tobacco tax freeze

While tobacco taxes are set to automatically increase each year in New Zealand, the Minister of Health is reportedly preparing a three-year tax freeze, as well as the removal of excise duty on heated tobacco. The potential for these measures has sparked an outcry from health stakeholders. [1]The person concerned denied this.

The new New Zealand government announced on November 27, 2023, a reversal of the anti-smoking policy that had been in place for several decades. It said it was abandoning not only the plan to ban the sale of tobacco products to people born in 2009 or later in 2027, but also the reduction in the number of points of sale and the marketing of very low nicotine cigarettes. These initiatives, however, placed New Zealand at the forefront of the fight against tobacco internationally. This had caused great emotion among health professionals, in New Zealand as in other countries.

Health Minister Casey Costello is now considering a three-year tax freeze on tobacco products, according to the NZ Herald.[1]Heated tobacco products could, for their part, be exempt from excise duties.

A controversial intention, which goes against health policy

Casey Costello denied the allegations, but the revelations sparked an outcry from health professionals. Some of them called for the junior minister to be relieved of her duties. "Casey Costello has lost all credibility as a Minister of Health. Everything she has done so far has been to the detriment of health. In fact, she is acting more like a Minister for the tobacco industry.", said Boyd Swinburn, co-chair of Health Coalition Aotearoa.

Ayesha Verall, the former health minister, has asked the junior minister to explain herself. Casey Costello has denied having taken steps to stop the indexation of tobacco taxes to the level of inflation, while she had made such a request to her department, according to NZ Herald. Ben Youden, the director of Action on Smoking and Health (ASH-NZ), has, for his part, highlighted the inconsistency of the junior minister's statements. In November 2023, the finance minister had in fact declared that she was counting on tobacco tax revenues to finance the government's policies, including tax cuts.

A government that listens to the tobacco industry

The scrapping of the flagship anti-smoking policy measures was one of the first moves by the new ruling coalition. It is led by the National Party, which includes the current Minister for Housing, Infrastructure and Sport, Chris Bishop, who was also a lobbyist for Philip Morris International (PMI). The National Party's allies, the Association of Consumers and Taxpayers (ACT) and New Zealand First, are also said to have lobbied to scrap the anti-smoking policy.

Stopping the increase in tobacco tax is a recurring demand from the tobacco industry, in order to keep its products affordable and increase its profit margins. The exemption of excise duty for heated tobacco is also insistent on the part of manufacturers, in particular small and medium-sized enterprises, in order to reinforce the very high profitability of these products. In the course of the measures envisaged, the intentions of the current government would confirm a clear influence of the tobacco industry on New Zealand public health policy. This clearly contravenes Article 5.3 of the WHO Framework Convention on Tobacco Control (FCTC), which stipulates that health policies must be protected from interference by the tobacco industry.

M.F.